While the prospect of better-than-expected results from the UK’s largest software house cheered the stock market, a trading update outlined how difficult trading conditions remain, especially among banks.
Misys said that in the banking and securities division, banks of all kind made further reductions in their IT budgets, particularly in the first half. Revenue for the year was down 8%, while the order intake fell 15%.
Initial license fee order intake fell 15% to 74m pounds ($124.4m) though the decline in the second half was markedly less than the first six months. The lower level of initial license fee revenue over the past two years has hit the growth of maintenance revenue but the slowdown in activity has hit professional services savagely, with revenue down 27%.
In January, Misys cut 300 jobs at its banking software unit, which will lead to a 7m pound ($11.2m) charge against operating profits likely to be in the region of 63m pounds ($100.8m).
The company’s healthcare systems operation in the US has enjoyed 8% revenue growth, though the fall in the value of the dollar will hit revenue and income. At Misys’ financial services division, revenue fell 5%.
Source: Computerwire
